LCC East District Board Meeting March 12-13, 2018

Every organization needs a group of people to keep all its ducks pointed in the same general direction, sometimes make hard decisions, and in general make sure things run the way they’re supposed to. Of the three (current) LCC Districts only the East District Board makes their minutes publicly available and so provides pundits like me with something to comment on. In this article I’ll be discussing the East District BOD meeting that took place on March 12-13, 2018. If you want to see all the details first-hand the meeting minutes are here.  

Churches Repaying Their Loans

After a previous meeting queried if churches should be required to repay the outstanding loan balance if the sale of the security didn’t cover the loan, I wrote an article asking why that was even a question.

The good news is that in this meeting they decided it’s not a question any more – and here’s what they passed:

Motion 18-023: That the board approve the DFF proposal as follows:
In situations where a property with an outstanding mortgage is sold and the sale revenue does not cover the cost of the outstanding mortgage

(a) When properties are owned by the CEF, the CEF will absorb any loss

(b) When a congregation or school owns the property and the CEF holds the mortgage, the congregation/school is liable to pay CEF the balance of the mortgage.

And that, ladies and gentlemen, is why lenders only loan a percentage of the value of the property – to ensure they always get their money back…to their depositors.

Congregations that voted “no” on the revised LCC Constitution

From the meeting minutes:

Regarding the vote on the Synodical constitution changes, the synodical President should be advised to pass on to the district Presidents the names of those congregations voting “no” to see if there are concerns that can be alleviated. It would be beneficial to have these resolved before the district convention.

If these “no” votes were protests against the way the restructuring was passed without a confirmation vote by using the “deeper magic” of moving most of the structure to the Statutory Bylaws, then good luck with that.

Nominations for Synodical Positions

Motion 18-017: As requested by President Teuscher, the board request the Commission on Nominations and Elections (CNE) to be responsible for managing the nominations and elections process for the positions of Regional Pastor, Circuit Counsellor, and Regional Mission & Ministry Council for the 2018 district convention.

Except elections for most of these positions are still barred by Synod in Convention until the 2021 convention.

However, if this question ever gets to LCC’s Commission on Constitutional Matters and Structure I’ll bet they’ll try to use the same trick that the ED Handbook Committee’s just played in an effort to get around a challenging spot Synod’s put them in.

What trick is that?

Read on.

Handbook Committee Rulings

1) Can the term of office for all elected entities be deemed to continue until the October 2018 ED Convention? Ruling: We see no issue in the elected positions continuing until the District convention.

Bylaw 17 states that “directors shall be elected for a term of three (3) years”. It should not be understood that this 3 year stipulation is intended to be exactly 3 years of 365 days.

And there you have it! The clear words of a document don’t mean what they say! Given that Lutherans are the church of “is” means “is”, this would almost be surprising except for (cough cough) CEF and its associated fallout.

Rather, it is the intent of the Bylaws to elect directors for one convention cycle. Under normal circumstances we would have done this in May 2018. However, due to the time constraints of restructuring, the convention was moved to October 2018. Thus, all elected individuals and officers are to serve for the complete convention cycle which ends in October 2018.

Since Synod will no longer work through the district corporations to provide services to the members of Synod as of January 1, 2019, it would not make sense to elect positions in October that would no longer exist in January. Therefore using sanctified common sense we further rule that: Since the Regional Pastor, Circuit Counsellors and Regional Mission and Ministry Council will officially begin to operate on January 1, 2019, all current (pre-2018 convention) elected individuals, appointed officers, department members and appointed committee members shall remain in their respective positions until December 31, 2018.

As I read it this ruling is effectively amending the East District’s corporate bylaws without the benefit of the normal amending process instead of clarifying ambiguous point of concern in the bylaws. The Handbook Committee may want to consult legal counsel about this decision, particularly if the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) is deemed to apply and someone decides to take exception:

From Gardiner Roberts: Corporations will have the full capacity, rights, powers and privileges of a natural person. Therefore a by-law will no longer be needed to confer any particular power on a corporation or its directors. A corporation’s acts will be valid even if the corporation has acted contrary to the letters patent or other instrument of incorporation, by-laws or the OCA. However, such contrary acts can still be challenged by a concerned party and directors may be personally liable for authorizing them

If the East District is federally incorporated then  the Federal “Not For Profit” act on a corporation changing its bylaws may apply. (Is the Synod CCMS is aware of this? I wonder…)

While I’m sympathetic to the spot Synod’s Jan 2019 cut-off date has put the Districts in, having the Handbook Committee effectively “legislating from the bench” is not the way to solve it.

This is also why using precise language is critical in crafting these documents – had the handbook specified “until the next convention” instead of “3 years” and/or given the Board the option of changing the meeting date, the Board or Handbook Committee could’ve brought an amendment forward that would’ve extended the current terms until the end of Dec 2018 and this wouldn’t be the issue it is now.

First Lutheran Windsor and former President Bugbee

This one comes from my “be careful what you ask for because you might get it” file.

When then-President Bugbee announced he wasn’t running for re-election, he also asked for a congregation somewhere east so he could be closer to relatives.

From the Canadian Lutheran:

If the Lord continues to give me good health, I also have no wish to end my active ministry even at the usual “quitting age” of 65. It is my hope that He may favour me with a call to return full-time to the parish ministry in eastern Canada so that I may do His work in one place where I can be available for my wife, and so that we together can address the needs we face in our extended family, especially with her aging mother.

First – I’ve heard of other pastoral candidates that wanted to be near or avoid particular places for various reasons as opposed to “God’s Will (as expressed by the Synodical authorities) be done . ”

I’m also aware of the kind of response these candidates usually received, and it’s generally not very positive.

But now precedent has been set – if a Synodical President can publicly ask for a Call in specific place, why can’t everyone else?

Maybe…because things don’t always work out the way one expects.

In this case First Lutheran Windsor  (FLW) – where Bugbee is now serving – is in a bit of a rough patch. In a prior meeting the ED Board had a discussion about churches  that made interest-only payments instead of paying down their loans – and FLW was mentioned in that discussion.

In this meeting FLW appeared in the Board minutes for a different reason:

(iii) Loan Request of First Lutheran Church, Windsor
Motion 18-022: That the following motion adopted by e-mail vote be ratified: 

That the board approve the recommendation of the CEF and DfF to grant the bridge loan to First Windsor up to $400,000 with the following conditions.

  • that the current mortgage be amended to reflect the total principal increasing from $880K to $1,280K.
  • that the DfF require a security document drafted indicating that the proceeds of the land sale once received must first be applied towards this bridge loan of $400K.
  • that all the necessary paperwork be properly filed with the business manager.

If this is to help FLW stay open until it sells a property, that may not fit in with CEF’s mandate for funding school and building construction as opposed to operations. On the other hand FLW’s boiler recently self-destructed and they may have to install an entirely new heating system. If the bridge financing is to cover the work until FLW gets reimbursed by insurance or sells some assets, then  all is well and good.

In either case, using a BMO mortgage calculator  I figured out that a $1.28M loan at 5% interest paid monthly over 25  years costs ~$7,500 per month for principal and interest. If FLW was previously making interest-only payments of $3.3K per month to service an $880k debt, that’s an increase nearly $4.2K / month.

Whatever the case may be about the loan, we need to keep everyone in our prayers that things get sorted out in due course.

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